Over the past month or so, the internet has been buzzing about an apparent licensing conflict between OnLive’s innovative Desktop App and Microsoft. According to several reports, and even a representative from Microsoft, OnLive’s app for iOS and Android was not inline with Microsoft licensing.

Back in March, Joe Matz, Corporate Vice President of Worldwide Licensing and Pricing for Microsoft released a brief statement on blog:

Some inquiries about these scenarios have been raised as a result of recent media coverage related to OnLive’s Desktop and Desktop Plus services. Additionally, the analyst firm Gartner raised questions regarding the compliance of these services last week. We are actively engaged with OnLive with the hope of bringing them into a properly licensed scenario, and we are committed to seeing this issue is resolved.

Immediately the media turned the story around to make it out as though OnLive was deceitfully disregarding Microsoft’s licensing terms. However, like Matz said, they WERE engaged with OnLive, with the hope of bringing them into a properly licensed scenario.

Well it looks as though that scenario may now be here. On Thursday, OnLiveFans’ member “beez1717″ noticed that the keyboard on the OnLive Desktop App for his iPad had changed. Later it was discovered that the keyboard had changed on the Android app as well.

“Yeah, it looks like they installed one that looks more like the iOS keyboard,” said OnLiveFans.com member, Pinesal. “Besides losing the handwriting, it seems like a better keyboard.”

At the surface it appeared as though the change was merely a cosmetic one, due to the fact that the new keyboard was more similar to the iPad’s native keyboard than the old one.

“It occurred to me that the reason for the change in keyboard could be related to a move away from Windows 7,” said Carter. “A quick check later and yes, they have.”

The previous media reports on this licensing fiasco suggested that if OnLive were to move away from Windows 7 and to Windows Server, it would bring them into compliance with Microsoft licensing. OnLive appears to have done just that.

“OnLive Desktop now uses Windows Server 2008 which does adhere to VDI/SPLA licensing and the end users notice minimal difference,” explained Carter.

We checked out the app, and there really are no major noticeable differences, other than the keyboard being changed. To see for yourself that the OnLive Desktop App now runs on Windows Server 2008, simply open up your Notepad application within the Desktop app, click on “Help” and then click “About Notepad”. It will bring up a box identical to the one you see in the image below.

Tada, OnLive now appears to be in compliance of Microsoft licensing. You’ve heard it here first on OnLiveFans.com.